National Commission on Physician Payment Reform Recommends Fee-for-Service Payment be Phased Out in Five Years

Here’s a huge announcement from the National Commission on Physician Payment Reform. They recently issued a report outlining 12 sweeping recommendations designed to rein in rampant health spending and improve our nation’s quality of care.

How will they accomplish this? By fundamentally restructuring the way doctors are paid.

The Commission is chaired by former Robert Wood Johnson Foundation President Steven A. Schroeder, M.D., with former Senator Majority Leader Bill Frist, M.D., as Honorary Chair. The commission calls for eliminating stand-alone fee-for-service payment by the end of the decade. They are also urging a five-year transition to a blended payment system that will yield better results for both public and private payers, as well as patients.

“We can’t control runaway medical spending without changing how doctors get paid,” said Dr. Frist. “This is a bipartisan issue. We all want to get the most from our health care dollars, and that requires re-thinking the way we pay for health care.”


Dark Daily did a great job of compiling important details contained within the commission’s report. We recommend reading the blog post so you can get a feel for what top players in healthcare think about the current payment situation.

If you have a few more minutes, though, check out the complete Commission’s Report. One, we noticed a problem — there’s no mention of direct primary care, a niche reinventing the payment system and benefitting patients and doctors alike. Two, the commission hasn’t actually offered any solutions. However, their assessment of what’s making healthcare too expensive in this country is spot-on. They cite fee-for-service reimbursement, reliance on technology, expensive treatments, a high proportion of specialists, hospital consolidations (bigger networks can negotiate higher reimbursement prices), disproportionate spending on a few very sick people, increased administrative costs (maybe with all those broken EMRs?), fear of malpractice lawsuits, and fraud/abuse. The admission is very telling — everyone knows we have a problem.

We can hear the counselor sitting with Health Care in a therapy session, uttering those famed words, “In order to address our problem, we need to admit we have one.” So there’s something promising about this commission’s report after all. Healthcare has major payment problems. And something needs to be done about it. The bigger question, though, is what exactly will keep this sinking ship afloat?